Compound Interest Calculator
Enter your starting amount, monthly contribution, expected annual return, and time horizon to see your projected balance — with a year-by-year breakdown of contributions vs. interest earned. Results update as you type.
| Year | Contributions | Interest earned | Balance |
|---|
What the results mean
Three numbers tell the story:
- Projected balance — what you would have at the end, if the assumed return held every year.
- Total contributions — every dollar you actually put in (initial + monthly deposits).
- Interest earned — the difference. This is compounding doing the heavy lifting.
Notice how interest starts small and then snowballs: in the later years it often exceeds your annual contributions. That crossover is the whole point of starting early.
How it works
- Your starting amount and each contribution earn interest every compounding period.
- Each period, the balance is multiplied by (1 + annual rate ÷ periods per year), then the period's contribution is added.
- The calculator repeats this for every period and records the balance at each year-end for the table.
With monthly compounding, each monthly deposit starts earning immediately. With quarterly or annual compounding, monthly deposits are spread evenly across the period.
Formula
Where P = initial principal, PMT = contribution per compounding period, r = annual rate (decimal), n = compounding periods per year, t = years.
Example
Example: $10,000 start, $500/month, 7% for 10 years (monthly compounding)
- Total contributions: $70,000
- Projected balance: ≈ $106,639
- Interest earned: ≈ $36,639 — more than a third of the final balance came from compounding, not deposits.
Use cases
- Retirement planning — model 401(k) or IRA growth over decades.
- College savings — see what monthly 529-plan deposits become in 18 years.
- "Start early" demos — compare starting at 25 vs. 35; the gap is usually shocking.
- Emergency fund targets — project a high-yield savings account balance over time.
Frequently asked questions
What is compound interest?
Compound interest is interest earned on both your original money and on the interest already added. Over time the growth accelerates — that is why starting early matters more than starting big.
What is a realistic annual return to assume?
The U.S. stock market has averaged roughly 10% per year before inflation over the long run (about 7% after inflation). Savings accounts and CDs pay far less. This calculator does not predict markets — it shows math, not guarantees.
Monthly vs. annual compounding — does it matter?
A little. More frequent compounding grows money slightly faster at the same nominal rate. The difference is small compared to the contribution amount and the number of years.
Are taxes included?
No. Real investment returns are reduced by taxes (and inflation). Treat the result as a before-tax, before-inflation illustration.
Why does the table assume contributions are spread evenly?
When compounding is quarterly or annual, your monthly deposits are spread evenly across each compounding period. With monthly compounding — the most common choice — each deposit compounds in the month it is made, which is exact.
Can I use this outside the US, or with another currency?
Yes. Compound interest math is the same everywhere — enter amounts in your own currency; the $ sign is just a label. You can ignore the 401(k) and IRA examples if those accounts don't exist where you live.
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Last updated: 2026-10-04 · WebTools Hub